AMD's numbers are in... $611 million loss

AMD posted their 10-K. Here's an excerpt from pages 29 and 30:
We may not be able to generate sufficient cash to service our debt obligations.

Our ability to make payments on and to refinance our debt, or our guarantees of other parties’ debts, will depend on our financial and operating performance, which may fluctuate significantly from quarter to quarter, and is subject to prevailing economic conditions and financial, business and other factors, many of which are beyond our control. We cannot assure you that we will continue to generate sufficient cash flow or that we will be able to borrow funds in amounts sufficient to enable us to service our debt or to meet our working capital and capital expenditure requirements. If we are not able to generate sufficient cash flow from operations or to borrow sufficient funds to service our debt, we may be required to sell assets or equity, reduce capital expenditures, refinance all or a portion of our existing debt or obtain additional financing. We cannot assure you that we will be able to refinance our debt, sell assets or equity or borrow more funds on terms acceptable to us, if at all.
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Could Microsoft buy out AMD if it came to it? At the least wouldn't they buy out AMD's graphics IP at auction to continue production of Xbox 360s?
 
nah I think Microsoft has enough problems trying to get Vista off the ground. It would definitely make things easier to only have to support Nvidia and Intel... drivers wouldn't be a problem at least. Amazing how computers started out with so many CPU companies and so many GPU companies and in spite of some close calls..... looks like only the original companies will remain:eek:

the AMD story seems to parallel the 3dfx story in many ways

3dfx executed a major strategy change just prior to the launch of Voodoo3 by purchasing STB Technologies, which was one of the larger graphics card manufacturers at the time; the intent was for 3dfx to start manufacturing, marketing, and selling its own graphics cards, rather than functioning only as an OEM supplier. This alienated 3dfx's OEM customers, all of whom chose to switch, and source their 3D chips from other manufacturers, rather than do business with a company who was their direct competitor at retail. With the purchase of STB 3dfx created a line of Velocity boards (a STB brand) that used crippled Voodoo3 chips, as a product to target the low-end market. The chip came with only a single functional TMU, making it similar to a Voodoo Banshee.

This strategy change was one of the main contributors to 3dfx's downfall; the company did not sell any Voodoo 4 or 5 chips to third party manufacturers. The company was also presumably distracted by the need to focus both on the retail market as well as the OEM market, selling cards to computer manufacturers. The latter was hard-won business, but provided a steady income to fund subsequent development. A significant requirement of the OEM business was the ability to consistently produce new products on the six month product refresh cycle the computer manufacturers required; 3dfx did not have the methodology nor the mindset to the focus on this business model. In the end, 3dfx opted to focus on the retail business using its own manufactured and branded products.

The Voodoo 3 was heavily hyped as the graphics card that would make 3dfx the undisputed leader but the actual product was below expectations. Though it was still the fastest by a small margin, the Voodoo 3 lacked 32-bit color and large texture support, features that fledging rival NVIDIA included in the competing RIVA TNT2. While at the time, few games supported large textures and 32-bit color, and those that did generally were too demanding to be run at playable framerates, the features "32-bit color support" and "2048x2048 textures" were much more impressive on paper than 16-bit color and 256x256 texture support. The Voodoo3 sold relatively well, but was disappointing compared to the first two models and 3dfx gave up the market leadership to NVIDIA.

As 3dfx attempted to counter the TNT2 threat, they were caught off guard by NVIDIA's GeForce 256, which took the performance crown by a wide margin, making it superior to the Voodoo 3 in all respects (except price). 3dfx missed a product cycle as they attempted to match the GeForce.
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http://en.wikipedia.org/wiki/3dfx
 
feanor1024 said:
AMD posted their 10-K. Here's an excerpt from pages 29 and 30:


Could Microsoft buy out AMD if it came to it? At the least wouldn't they buy out AMD's graphics IP at auction to continue production of Xbox 360s?
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I haven't looked at other AMD reports, but sometimes companies include that disclaimer as a standard item.
 
coldpower27 said:
That would have require development of yet another core for the 65nm process. Or continuing ramping 2 cores to higher clockspeeds instead of 1. Like it or not DDR1 is receding and prices are just going to go up.
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...on an indefinite timeline sure, but we are only talking about a few years here. AM2 was a complete waste of time and could have been skipped.
 
Tutelary said:
...on an indefinite timeline sure, but we are only talking about a few years here. AM2 was a complete waste of time and could have been skipped.
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Not really AMD needs to bring DDR2 to the masses, as well thankfully this Socket will support desktop based K10 CPU's without the enhanced power down features and HT3.0, so people on DDR2 do have an upgrade path.

This is the problem with an IMC your locked into supporting 1 memory type. Unless you wish to spend additional transistor budget on multiple controllers.

Forcing OEM's to keep using DDR1 would not have allowed AMD to break into the OEM space.
 
coldpower27 said:
Not really AMD needs to bring DDR2 to the masses, as well thankfully this Socket will support desktop based K10 CPU's without the enhanced power down features and HT3.0, so people on DDR2 do have an upgrade path.

This is the problem with an IMC your locked into supporting 1 memory type. Unless you wish to spend additional transistor budget on multiple controllers.

Forcing OEM's to keep using DDR1 would not have allowed AMD to break into the OEM space.
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the benefits of ddr2 vs ddr1 in the amount of time we were talking about are completey negligable. A window of 2 or 3 years, max. from 939 to am3 with no stops along the way. AM2 was a stopgap and look what happened to AMD as a result.
 
They could've had a trickle of 939 parts, just as Intel trickled out Pentium D to prevent collapse of value of current customer inventory. But nope, 939 gone, must get a platform? Go Conroe.
 
jhtrico1850 said:
They could've had a trickle of 939 parts, just as Intel trickled out Pentium D to prevent collapse of value of current customer inventory. But nope, 939 gone, must get a platform? Go Conroe.
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They do I believe, your limited to Athlon 64's only, S939 has become AMD's value platform, just like the S754's with only Sempron production continuing.
 
Tutelary said:
the benefits of ddr2 vs ddr1 in the amount of time we were talking about are completey negligable. A window of 2 or 3 years, max. from 939 to am3 with no stops along the way. AM2 was a stopgap and look what happened to AMD as a result.
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It's not about performance, it's about cost. You have no proof that DDR2 benefits are completely neligible, face it DDR1 memory is being phased out, and since Intel is using DDR2 forcing OEM's to juggle 2 memory types would effectively lock AMD out of the market.

If AMD was locked into DDR1 they would be losing even more, fast DDR2-800 is about 5-8% faster then DDR400 for the AM2 platform, you can't use overclocked memory as DDR400 as ordered by JEDEC is the final official speed grade there.
 
Pretty simple. AMD has spent more money on R&D compared to a year ago. A year ago they spent 264 million on R&D and now they are spending 432 million, a 63% increase. An acid test shows AMD to be in a bad spot compared to a year ago. If sales stopped AMD would not be able to meet current liabilities (0.75 : 1.00). A year ago they were ok (1.10 : 1.00). AMD must raise cash through offering bonds, converting inventory into cash, and/or turning their R&D spending into a product they can sell that people will want to buy. Sales are only down about 7.4% compared to this time last year for their entire product lineup. Marketing has also increased 25% so that cost them some money. I consider their situation to be a combination of internal R&D spending and external forces such as the Intel CPU lineup cutting into their sales. Sale of AMD CPUs is down over 31% compared to this time last year. ATI has done well for them and is a profitable division. The division they are having problems with is their CPU division which has become uncompetitive. (data source)
 
http://seekingalpha.com/article/32901

Sumit Dhanda - Banc of America Securities

The other question I have, I know you talked a little bit, Bob, about restructuring efforts, et cetera, but can you help us understand why the R&D line was up so significantly on a sequential basis for the first quarter?

Robert J. Rivet

The part you have to remember is we only had nine weeks of the ATI Corporation that we purchased on October 24th in the fourth quarter, so there was an unnatural nine-week to 13-week comparison. ATI is a very engineering-centric corporation that we purchased. That is what we really wanted in that acquisition, so that is why you saw that line move so much.
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I think that AMD should have skipped AM2 altogether, especially with the acquisition of ATI. Instead, they should have focused on merging ATI technology with their own for the next platform. With DDR3 so close, they could have focused on high clock frequencies to fight Intel and then beat them to the punch with the DDR3 generation of mobos/cpus/PCI-E next-gen. Especially since they are discounting their new chips so far anyway. Brisbane 1.9GHz is just a bit over half the price of an E4300: http://www.newegg.com/Product/Product.aspx?Item=N82E16819103046
 
coldpower27 said:
It's not about performance, it's about cost. You have no proof that DDR2 benefits are completely neligible, face it DDR1 memory is being phased out, and since Intel is using DDR2 forcing OEM's to juggle 2 memory types would effectively lock AMD out of the market.

If AMD was locked into DDR1 they would be losing even more, fast DDR2-800 is about 5-8% faster then DDR400 for the AM2 platform, you can't use overclocked memory as DDR400 as ordered by JEDEC is the final official speed grade there.
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you're missing the point. 5% is negligable to the wide majority of users who would otherwise have to purchase a new mobo, ram, and a new processor instead of just a processor. Most people when given the chance would have upgraded to a high end socket 939, but such things did not exist. When pushed to upgrade most people were not going to spend all that money for second best with am2 but they would have spent significantly less to stay on 939.
 
Tutelary said:
you're missing the point. 5% is negligable to the wide majority of users who would otherwise have to purchase a new mobo, ram, and a new processor instead of just a processor. Most people when given the chance would have upgraded to a high end socket 939, but such things did not exist. When pushed to upgrade most people were not going to spend all that money for second best with am2 but they would have spent significantly less to stay on 939.
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That makes sense. I have a 3400+ socket 754, and I certainly would not spend money on an AM2 processor since I would have to buy a new board and RAM and still be behind the competition. If I have to change everything out, I would just go with a Core 2.
 
TonyLee said:
That makes sense. I have a 3400+ socket 754, and I certainly would not spend money on an AM2 processor since I would have to buy a new board and RAM and still be behind the competition. If I have to change everything out, I would just go with a Core 2.
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Exactly.
 
TonyLee said:
That makes sense. I have a 3400+ socket 754, and I certainly would not spend money on an AM2 processor since I would have to buy a new board and RAM and still be behind the competition. If I have to change everything out, I would just go with a Core 2.
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And I'm one generation behind you and was ready to plok down the $$ for S939 last year, then I heard about AM2 and realized AMD was going to go through a phase of utter stupidity... Unfortunately, it usually takes these outfits awhile to get the stupid out of their system.
 
Darakian said:
I fail to see what the real issue is with all this "I need a faster CPU in 939"
You can get a dual core opty @ 2.6ghz in 939 if you like
http://www.newegg.com/Product/Product.aspx?Item=N82E16819103002

3Ghz is the fastest AM2 chip out at the moment. Is 400Mhz that big of a deal? :confused:
Sure it costs a bit more and you get less, but you can get a high end chip on 939.
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"I need a faster cheap CPU in 939" :D . The 3GHz X2 on AM2 is very cheap so I also want a cheap 3GHz CPU for my system because I don't like to overclock (much) :p
 
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